Crypto Exchange Coinbase intends to go public on April 14th via direct listing based on updated information. This means stocks of Coinbase shares will be available for trading on the Nasdaq, bringing another slice of the crypto space into mainstream funding.
However, confusion can accompany activity in the traditional financial world. Corporations, accredited investors, and other businesses deal with stocks and finance in a variety of ways, but what about the everyday participants in retail? If a retailer wants to buy Coinbase stock while it is listed on the Nasdaq, or wants to buy it before the trading day, how do they go about it?
“With a direct listing, no brokerage firms play a role in that listing until they are available on an exchange,” a spokesman for financial services company Fidelity told Cointelegraph. “The first time a retail investor has access to a stock that is directly listed on a stock exchange is when it’s available to everyone, just like existing stocks like AAPL, FB and MSFT.”
The situation is similar with the direct listing from Coinbase, which is based on an article by NerdWallet. Coinbase has selected “COIN” as its stock market ticker, as shown in a blog post by Coinbase.
Coinbase has grown significantly since its inception in 2012. As early as 2018, Coinbase had a valuation of $ 8 billion after a financing round in which $ 300 million was secured. The first quarter of 2021 brought favorable numbers for the company, in which Coinbase sales were $ 1.8 billion, a high for the company.
Coinbase is conducting a direct listing, not an IPO
Direct listings differ from IPOs in a number of key areas, including insurer involvement, although both serve as ways for companies to go public. Underwriters are involved in initial public offerings, but not in direct listings. “An underwriter is any party who evaluates and takes on another party’s risk for a fee,” explains Investopedia, adding:
“The fee paid to an insurer often consists of a commission, a premium, a spread or interest. Underwriters play a vital role in many industries in the financial world, including the mortgage industry, insurance, stock markets, and some common types of debt trading. “
Coinbase filed for an IPO with the US Securities and Exchange Commission at the end of 2020. The company originally planned a direct listing in March, but the exchange postponed the event to April after receiving a $ 6.5 million fine from the US and settling the Commodity Futures Trading Commission. The fine arose from claims by the government agency that Coinbase had not correctly reported the exchange volume. The fine also included a worker fiddling with the exchange volume numbers through “self-trading”.
Trade Coinbase share prices on FTX before the trading day
Before Coinbase is listed on the stock exchange, interested parties can trade Coinbase futures contracts according to an FTX information document on the FTX crypto derivatives exchange. The exchange launched the product with token settlement in December 2020. “Coinbase (CBSE) is a pre-IPO contract,” says FTX on the trading page for the product, adding:
“It measures Coinbase’s market capitalization divided by 250,000,000. CBSE funds will be converted into the corresponding amount of Coinbase Fractional Stock Token at the end of the first public trading day by Coinbase. In the event that Coinbase is not publicly listed by June 1, 2022, CBSE balances will expire to $ 32 based on a valuation of $ 8 billion. “
Tokenized stocks on FTX represent ownership of the respective underlying stocks. Using the example of its tokenized Tesla trading product, FTX says in a help article on its website: “These spot tokens are covered by shares of Tesla shares that are held by CM-Equity. If desired, they can be redeemed with CM-Equity for the underlying stocks. ”
Tokenized Stocks on FTX and its CBSE pre-IPO contracts result from the collaboration between FTX and the financial services company CM-Equity AG. However, FTX is not available to customers in certain regions such as the United States.
How do I get the lowest price on Coinbase shares?
“The lowest price is relative to an investor’s trading strategy,” said the Fidelity spokesman, adding, “Once a Fidelity customer decides what is fair value for a stock, they can set a price warning as to when the stock will reach its target price can. ” You can set a limit order or get into position via a regular schedule – e.g. B. $ 50 per month – which is never more convenient as we offer fractions and online commissions of $ 0. ”
Coinbase has already sold some of its stocks. In March it was revealed that private auctions were taking place at which the price per share was reportedly between $ 350 and $ 375. Coinbase is estimated to have a valuation of $ 100 billion. Later in March, it was reported that 114,850,769 Coinbase shares were registered by the company. The shares fall under the Class A common share category.